In an Aggregate Expenditures Diagram,a Lump-Sum Tax (T)will

question 80

Multiple Choice

In an aggregate expenditures diagram,a lump-sum tax (T) will:

• A) not affect the C + I_g + X_n line.
• B) shift the C + I_g + X_n line upward by an amount equal to T.
• C) shift the C + I_g + X_n line downward by an amount equal to T.
• D) shift the C + I_g + X_n line downward by an amount equal to T × MPC.

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Definitions:

Natural Resources

Natural resources are materials or substances such as minerals, forests, water, and fertile land that occur in nature and can be used for economic gain.

Business Planning

The process of formulating goals, strategies, and actions to start, sustain, and grow a business.

Communism

An economic system characterized by public ownership of property and government planning of the economy.

Capitalism

The dominant economic system in the world today. Capitalist economies are characterized by private ownership of property and competition in the pursuit of profit.